Utah Fraud Reporting

Definition of “Fraudulent Insurance Act”

Utah Code 31A-31-103 defines “fraudulent insurance act”:

(1)A person commits a fraudulent insurance act if that person with intent to deceive or defraud:

(a) knowingly presents or causes to be presented to an insurer any oral or written statement or representation knowing that the statement or representation contains false, incomplete, or misleading information concerning any fact material to an application for the issuance or renewal of an insurance policy, certificate, or contract;

(b) knowingly presents or causes to be presented to an insurer any oral or written statement or representation:

(i) (A) as part of, or in support of, a claim for payment or other benefit pursuant to an insurance policy, certificate, or contract; or
(B) in connection with any civil claim asserted for recovery of damages for personal or bodily injuries or property damage; and
(ii) knowing that the statement or representation contains false, incomplete, or misleading information concerning any fact or thing material to the claim;

(c) knowingly accepts a benefit from the proceeds derived from a fraudulent insurance act;
(d) assists, abets, solicits, or conspires with another to commit a fraudulent insurance act;
(e) knowingly supplies false or fraudulent material information in any document or statement required by the department;
(f) knowingly fails to forward a premium to an insurer in violation of Section 31A-23a-411.1; or
(g) knowingly employs, uses, or acts as a runner for the purpose of committing a fraudulent insurance act.

(2) A service provider commits a fraudulent insurance act if that service provider with intent to deceive or defraud:

(a) knowingly submits or causes to be submitted a bill or request for payment:
(i) containing charges or costs for an item or service that are substantially in excess of customary charges or costs for the item or service; or
(ii) containing itemized or delineated fees for what would customarily be considered a single procedure or service;

(b) knowingly furnishes or causes to be furnished an item or service to a person:
(i) substantially in excess of the needs of the person; or
(ii) of a quality that fails to meet professionally recognized standards;

(c) knowingly accepts a benefit from the proceeds derived from a fraudulent insurance act; or
(d) assists, abets, solicits, or conspires with another to commit a fraudulent insurance act.

(3) An insurer commits a fraudulent insurance act if that insurer with intent to deceive or defraud:

(a) knowingly withholds information or provides false or misleading information with respect to an application, coverage, benefits, or claims under a policy or certificate;
(b) assists, abets, solicits, or conspires with another to commit a fraudulent insurance act;
(c) knowingly accepts a benefit from the proceeds derived from a fraudulent insurance act; or
(d) knowingly supplies false or fraudulent material information in any document or statement required by the department.

(4) An insurer or service provider is not liable for any fraudulent insurance act committed by an employee without the authority of the insurer or service provider unless the insurer or service provider knew or should have known of the fraudulent insurance act.

Mandatory Fraud Reporting Statute(s)

Utah Code 31A-31-104 requires mandatory disclosure of info:
(1) (a) A person shall report a fraudulent insurance act to the department if:
(i) the person has a good faith belief on the basis of a preponderance of the evidence that a fraudulent insurance act is being, will be, or has been committed by a person other than the person making the report; and
(ii) the person is:
(A) an insurer; or
(B) in relation to the business of title insurance, an auditor that is employed by a title insurer.

(b) The report required by this Subsection (1) shall:
(i) be in writing;
(ii) provide information in detail relating to:
(A) the fraudulent insurance act; and
(B) the perpetrator of the fraudulent insurance act; and
(iii) (A) state whether the person required to report under Subsection (1)(a) also reported the fraudulent insurance act in writing to:
(I) the attorney general;
(II) a state law enforcement agency;
(III) a criminal investigative department or agency of the United States;
(IV) a district attorney; or
(V) the prosecuting attorney of a municipality or county; and
(B) if the person reported the fraudulent insurance act as provided in Subsection (1)(b)(iii)(A), state the agency to which the person reported the fraudulent insurance act.

(c) A person required to submit a written report under this Subsection (1) shall submit the written report to the department by no later than 90 days from the day on which the person required to report the fraudulent insurance act has a good faith belief on the basis of a preponderance of the evidence that the fraudulent insurance act is being, will be, or has been committed.

(2) An action brought under Section 31A-2-201, 31A-2-308, or 31A-31-109, for failure to comply with Subsection (1) shall be commenced within four years from the date on which a person described in Subsection (1):
(a) has a good faith belief on the basis of a preponderance of the evidence that a fraudulent insurance act is being, will be, or has been committed; and
(b) willfully fails to report the fraudulent insurance act.

(3) The department may by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, provide a process by which a person described in Subsection (1)(a)(ii)(B) may comply with the requirements of Subsection (1) by reporting a fraudulent insurance act to the insurer with whom the person is employed, except that the rule shall provide that if the person reports the fraudulent insurance act to the insurer, the insurer is required to report the fraudulent insurance act to the department.
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